Enormous, Humongous Trade Deficit Up In April

The trade deficit measures how much more we buy from other countries than they buy from us. It is a way to measure loss of jobs, loss of factories, loss of expertise, loss of supply chains, loss of money and loss of national opportunity.

The overall U.S. international goods and services trade deficit rose to $47.2 billion in April, from (revised) $44.2 billion in March. This is the highest since July 2012.

What The Trade Deficit Means

Imagine American factories and other businesses receiving an additional $44.2 billion in orders last month, and every single month, and you can visualize the effect of this trade deficit. How many people would be hired due to an additional $44.2 billion in orders? How many suppliers would get a boost in orders? How many local businesses surrounding these thriving factories would be getting extra business? That is a measure of how many people are not working and how much economic damage is being done because of the trade deficit. Think about the effect of that, repeated every single month, and you are seeing the effect of the trade deficit.

Korea Trade Deficit And American Steel Jobs

Remember how the U.S.-Korea free trade agreement, approved by Congress in 2011, was going to boost our economy and “create jobs”? The U.S. goods deficit with South Korea reached a new record in April, having gone up for the second straight month, to $2.3 billion, from $1.3 billion in March.

On top of that, South Korea is exporting “oil country tubular goods (OCTG)” – pipes and tubes used for petroleum production – to America at prices that appear to be below cost and in ways that appear designed to circumvent international trade laws. Korea doesn’t use these products so their production is entirely about weakening the American steel industry. (See Pittsburgh Post-Gazette: “U.S. Steel closes two tubular plants indefinitely, including one in McKeesport.”)

In July 2013, domestic steel producers filed a trade case that is now pending at the U.S. Department of Commerce. A final decision will be made in early July 2014 and it is critical that our government fully investigates this cheating.

Stand with us and urge our government to make the right choice: save our steel jobs.

The April U.S. goods deficit with China jumped almost a third, to $27.3 billion, from $20.4 billion in March. We also had a $14 billion trade deficit with the European Union and a $7 billion trade gap with Germany, the highest on record.

About Dave Johnson

Dave has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.